Do federal spending and tax policies build cities or promote sprawl?

Scholars have long debated the impact of federal spending on metropolitan form. This paper presents a broad study of the extent and influence of recent federal subsidies on suburban land absorption in one major urbanized area, Chicago. The federal government spends considerably more per capita on city residents than on suburbanites. However, the centripetal force generated by this spending pattern is far outweighed by the centrifugal forces resulting from federal housing subsidies. Although much smaller than transfers, federal housing subsidies substantially reduce the price of land in the outer suburbs and hence play a major role in encouraging land absorption. (C) 2002 Elsevier Science B.V. All rights reserved.